A sense of foreboding.
New fears every week.
While these words may sound like life during the pandemic, they also describe the eerie period 20 years ago when the world grappled with another formidable enemy: the Y2K bug.
Despite heightened apprehension, Y2K didn’t cripple society, although changes came for businesses that ended up lasting permanently. The same pattern will likely repeat when humans beat back the coronavirus; already, there has been massive digital transformation occurring at companies, based on new data from ZoomInfo.
It appears certain B2B technologies will become more entrenched after the pandemic, including software for web conferencing, electronic signatures, and human resources management.
In squinting ahead to the post-pandemic business world, it helps to first look back at how Y2K influenced business technology.
Y2K Preparedness Leads to Outsourcing Boom
Unlike the coronavirus, the year 2000 (Y2K) bug was not an organism, but instead a software glitch rooted in the past. From the 1960s onward, many computer programs used dates based on two digits each for month, day, and year. For example, July 4, 1970, was noted as 070470 in many software codes. Developers only used two digits instead of four for the year to save storage space, which was more expensive back then.
As time progressed, awareness rose over the potential problem of using only two digits for the year—namely, that when 1999 switched over to 2000, software might recognize the 00 as 1900 instead. Doomsday concerns followed: Would bank interest rates go haywire if back-end systems didn’t know the correct date? Could a power grid fail during the date rollover? Would planes fall in mid-flight?
There were also broader worries about the supply chain, which, as we’ve seen in 2020, can crumble during worldwide events. “There’s so many links in our global supply chains that all it takes is a few weak links to cause problems,” a chief economist at Deutsche Bank told CBS News when discussing Y2K in late 1999.
In response, “A legion of programmers and IT professionals squashed the millennium bug by checking and rewriting millions, if not billions, of lines of code,” the Washington Post wrote in 2019, looking back on Y2K’s 20-year anniversary.
“A legion of programmers and IT professionals squashed the millennium bug by checking and rewriting millions, if not billions, of lines of code.”Washington Post
With so much IT work needed before January 1, 2000, businesses in the United States looked beyond the country’s borders for more computer engineers to help. This approach planted the seeds for offshore IT outsourcing that became the norm in the software industry.
“Enterprises had to look outside the U.S.—primarily to India—to a different model to get that work done,” CIO reported in 2016. “In doing that, they found they could rely on labor arbitrage and it worked very well. That experience set the table for rapid adoption of labor arbitrage outsourcing in the early 2000s.” Labor arbitrage refers to hiring workers in certain locations where it costs less to employ them.
There were other changes after the millennium bug. Many of today’s common cybersecurity features were born in the Y2K period.
“[Y2K] brought firewalls and anti-virus software to the forefront as organizations aimed to prevent the anticipated spread of malware across what was expected to be significantly vulnerable systems,” according to Security Magazine, not sounding all that different from the challenges of the current virus. “Ultimately, the thought process was to provide a shield of protection to keep the bad guys outside the network ‘walls.’”
Technology & IT Concepts that Y2K Popularized
In the end, New Year’s Eve 1999 came and went without massive problems. The hefty preparedness efforts paid off, although some critics decried Y2K as an overhyped event.
Some Y2K-related problems did occur on or shortly after January 1, both serious and comical. In Japan, a radiation alarm system failed at a nuclear plant due to the bug, although the facility itself remained safely operational, according to the Associated Press.
Meanwhile, in New York state, a customer at an old-school video store turned in a rental late, prompting the store’s computer to conclude the video was overdue by 100 years and to assess a $91,000 fine.
Working From Home Sparks Digital Transformation During the Pandemic
The current pandemic has turned out to be more dire than the Y2K bug. Whereas society had years to prepare for the year 2000 date rollover, the coronavirus stormed into the world in a matter of months.
As of May 11, 2020, more than 284,000 people worldwide had died from Covid-19, the illness caused by the coronavirus—79,000 in America alone. The U.S. economy faced its worst days since the Great Depression due to stay-at-home orders, and millions of people were forced to work from home to isolate the virus.
Even before the pandemic, remote work had grown by 44% over the last five years, with more than 60% of companies now employing remote workers. The pandemic greatly pushed that trend forward.
In fact, a research survey found that in China, during the pandemic, 29% of respondents said they tried a work-from-home app for the first time, according to a report by advertising and marketing agency Ogilvy.
In China during the pandemic, 29% of respondents said they tried a work-from-home app for the first time.Ogilvy, advertising and marketing agency
The notion that certain technologies would benefit from work-from-home arrangements perhaps seems obvious. Still, the amount of growth in some cases since the pandemic surfaced is staggering, according to ZoomInfo’s analysis of over 14 million companies in its database. ZoomInfo looked at the following five types of software commonly used for remote work:
- Web conferencing platforms, which allow people to hold video-based meetings in real time from various locations.
- Team collaboration software, which sets up real-time online chatting and idea sharing.
- File sharing applications, which give online access to digital files, often to many people simultaneously.
- Electronic signature (eSignature) tools, which let individuals sign their names electronically to contracts and other documents.
- Human resources management systems, which in part offer workers self-service options for benefits, time off, and other HR matters.
ZoomInfo’s analysis tracked the number of business installations based on tech signatures left on websites and other sources.
ll five technologies have shown increases compared to January—some much greater than others. In all cases, the products had a unique advantage: New customers needed help so quickly that the months-long evaluation phase most companies go through for software purchases likely was curtailed or eliminated. It’s plausible that whatever product was top of mind to a CIO or IT manager got immediate approval.
These technologies will likely contribute to broad, long-term changes in how businesses operate in the following areas:
- Collaboration and communication
- Work productivity
- Cost savings
- Office environment
Let’s look at each of these changes in more detail.
Collaboration and Communication
Corporate countermeasures to the coronavirus may not necessarily improve collaboration, but the nature of teamwork and communication will change for good. Like back in 1999 during Y2K, agile approaches have proven important as employees adjust to remote work.
No other tech seems to have grabbed the pandemic workforce’s attention more than web conferencing, which saw business installations increase by more than 15,000 from February 29 to March 31.
While competitors Zoom, Cisco WebEx, and GoToWebinar have all seen growth during this period, Zoom is the clear winner, with its business installations jumping 319% from January to March, according to ZoomInfo’s data. (ZoomInfo is not affiliated with Zoom.)
Of the businesses analyzed by ZoomInfo, two industries saw the most growth in customer installations from February to March:
- Nonprofit and religious organizations, with an incredible increase of 3,582%, likely stemming from churches and similar groups attempting to hold services online for the first time.
- Education, including public schools and colleges, which increased 1,420% as instructors held virtual class meetings.
Interestingly, those two industries may not lean on web conferencing once the pandemic subsides, since both churches and schools ideally encourage in-person gatherings. However, hospitals have experienced smaller, yet noticeable, triple-digit increases in web conferencing to accommodate more telehealth appointments.
This trend will keep going after the pandemic given the industry has long promoted the benefits of remote patient visits.
In broader strokes, when the coronavirus emergency lifts, it is likely that the use of web conferencing will remain in place at levels higher than before the pandemic. Prolonged social distancing or school closures may require a large subset of workers to remain at home, and companies may also prefer fewer employees to be in offices at any one time.
Other resources, such as file sharing (e.g., Google Drive or Box) and collaboration software (e.g., Slack or Confluence), also found themselves before a larger audience during the pandemic. At one point on March 16—three days after President Trump declared a national emergency—statistics showed that half a million new users had signed up for Slack in one hour, according to a tweet from CEO Stewart Butterfield.
“Slack’s not specifically a ‘work from home’ tool; it’s more of a ‘create organizational agility’ tool,” Butterfield tweeted. “But an all-at-once transition to remote work creates a lot of demand for organizational agility.”
An improvement in work efficiency may stand as a result of new technologies being used during the pandemic.
For example, business installations of file sharing software increased by 6% from January 2020 to March 2020, according to ZoomInfo’s data.
File sharing, such as Box and Google Drive, allows multiple people to view and edit documents simultaneously. Rather than emailing various versions of a document or even passing hardcopies among coworkers, file sharing gives a central spot for a single version of a doc to exist. Being able to perform reviews and revisions while multiple colleagues work from home is a strong argument for the software, but even within an office, file sharing makes life easier.
Additionally, automated tasks may be getting a stronger push during work-from-home setups. Automation uses software to replace repetitive manual tasks, so it saves time.
A good example is eSignature software, which saw a 21.5% increase in business installations from January 2020 to March 2020. It appears eSignature vendor DocuSign is largely pushing that spike, with ZoomInfo data indicating a 30% boost for DocuSign.
Although industry findings about eSignature use were not solid in the ZoomInfo data, the numbers suggest that growth was driven by banks, which need customer signatures rendered electronically to offer new services such as loans.
Automation is also helping finance professionals improve processes for quarterly reporting, accounts payable, customer billing, and supplier invoices, the Wall Street Journal reported.
For many financial executives, the pandemic “is accelerating the vision that they’ve already had for a long time,” Michael Heric, a partner at consulting firm Bain & Company, told the Journal. “While it could have taken years or even decades to make that shift, I think you’re going to see it much faster now.”
Meanwhile, HR management systems have also seen a boost during the pandemic, jumping up in installations by 17% from January 2020 to March 2020. Payroll giant ADP, in particular, is outpacing HR management systems overall in terms of increased percentage of installations.
Why have HR management systems benefitted? While these platforms do not necessarily improve worker productivity, they allow for employee self service, meaning a worker can put in for sick time or review a pay stub remotely rather than filing paperwork or needing an in-person visit to an HR rep. The systems also allow companies to continue time-sensitive activities, such as review cycles, even while workers are at home.
Much like in the post-Y2K years—when people gained familiarity with new security software—a general productivity boost during the pandemic stems from workers who become more technologically proficient.
Those skills prove important during periods of digital transformation, and there is a clear business interest in educating workers about new technologies, wrote Rosabeth Moss Kanter, a professor of business administration at Harvard Business School.
Although it remains to be seen precisely what savings companies and staff will realize as a result of workplace shifts during the pandemic, the following conjectures seem reasonable:
- Work-from-home arrangements, bolstered by effective tech, could reduce costs at offices by hundreds of thousands of dollars for some companies. “We estimate a typical employer can save an average of $11,000 per half-time telecommuter per year,” research firm Global Workplace Analytics wrote. “The primary savings are the result of increased productivity, lower real estate costs, reduced absenteeism and turnover, and better disaster preparedness.”
- Employees could save on housing and commuting costs if permanent remote work becomes an option for some. The time and money to drive or take public transit to work can be significant, particularly in larger cities. Further, employees could better control their housing costs if they have more flexibility on where to live. “Living in cities like Lancaster, Pa., or Cincinnati, Ohio, would, in terms of rent or mortgage, cost $1,000 to $2,000 less a month than if one were to live in a smaller house or apartment in New York or San Francisco,” according to MoneyUnder30.com.
Much of IT’s efforts to combat the Y2K bug built from the idea that better computing systems would improve business long term. Technology shifts during the pandemic likewise have the potential to benefit the health and environmental stewardship of offices and their workers.
As noted above, the use of eSignature software has jumped, which could portend less reliance on paper.
“Paper-based processes hurt my soul.”Suzette Kent, federal CIO at the U.S. Office of Management and Budget
Technology managers in the federal government have benefited during the pandemic from prior efforts to use eSignature software to sign off on forms remotely, Suzette Kent, federal CIO at the U.S. Office of Management and Budget, told the Wall Street Journal.
“Paper-based processes hurt my soul,” Kent said.
Many observers have noted that the dense, open-office environment in fashion now may need to adapt after the pandemic, as workers will be leery of sitting within six feet of colleagues for eight hours or more a day.
The Y2K bug created a slow build-up that centered on one point in time: the change in date from December 31, 1999, to January 1, 2000. In contrast, the coronavirus pandemic swept over humanity in a matter of months and resulted in ever-changing circumstances.
However, in both situations, technology and IT allowed companies to respond. After Y2K, some of the biggest corporate measures—such as the U.S. outsourcing engineering needs to India and elsewhere—never went away.
It’s foreseeable that changes made to the work environment during the Covid-19 scare will also remain in place, including work-from-home arrangements that are bolstered by modern software, company flexibility, and employee adaptability.
“We found ways to use technology that we never explored before,” New York Governor Andrew Cuomo said in April during one of his daily pandemic briefings. “Using technology for health care, using technology to work from home, using technology for education—these are all positives that we can learn [from].”
For more stories, insights and market trends from ZoomInfo’s proprietary data, follow us on Medium.
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